Arbor Capital

Brexit Perspective

51.9% of the voters of the UK wanted out

I honestly don’t have a strong opinion about this issue and have enjoyed being on the ground in London during and after the election, discussing the concerns and issues with people in London.

The Leave or Remain referendum should have been about sovereignty. It should have been a time for Britain to primarily reflect on and evaluate its relationship with the EU, and secondarily its relationship with the rest of the world. Countries do this from time to time. Think NAFTA and the TPP. Unfortunately, like most campaigns, it devolved into scare tactics.

Among many arguments these were the primary sound bites:

The LEAVE camp used fear of immigrants (sound familiar)

The REMAIN camp used fear of severe economic pain and the possibility for recession/depression

Going into this, I felt that either way the vote went, Britain’s economic strength wouldn’t be diminished. Perhaps a reshuffling of trading partners would occur, coupled with volatility in the Pound Sterling. What won’t change is that the UK has one of the strongest and most resilient economies in Europe which is open, promotes growth and opportunity.

Culturally, I don’t completely understand the tears and strong feelings about the results. Europe will still be close, flights will still go between London and Paris. In my 5 years primarily living in London, I’ve learned that many British consider themselves something different from those on the continent. They are stoic, resolute and calm and of course separated by a channel of water. This sense of difference was strong enough that the UK really only had 1 foot in the EU party as they kept the Pound Sterling and never switched to the Euro. France and Germany didn’t keep the Franc and Deutschmark. The UK also opted out of the Schengen Agreement which allows freedom of movement across borders in continental Europe. Anyone landing in the UK must produce a passport. When traveling from France to Germany, you don’t need to do this.

British Prime Minister David Cameron gave a long, heartfelt speech as he mapped out his resignation and transition, “the British people have made a choice, that not only needs to be respected but those on the losing side of the argument – myself included – should help make it work.” He continued, “I said before that Britain can survive outside the EU and indeed that we could find a way. Now the decision has been made to leave, we need to find the best way and I will do everything I can to help.”
As of this writing, we have HSBC, Unilever, Vodafone and Diageo as part of our Foreign Global Brands portfolio, all of which are headquartered in London. After the initial sell off, the FTSE 100 is higher today than it was before the vote.